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ON A CONSUMER‐BASED EMISSION TAX POLICY
Author(s) -
TOSHIMITSU TSUYOSHI
Publication year - 2010
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2009.02150.x
Subject(s) - duopoly , economics , product differentiation , microeconomics , economic surplus , product (mathematics) , tax rate , monetary economics , welfare , cournot competition , market economy , mathematics , geometry
Based on a model of environmental quality differentiated products, we explore how an emission tax charged on consumers who choose an environment‐unfriendly good, i.e. a consumer‐based emission tax policy, affects the unit emission level of the product, the environment, and consumer and producer surplus. Then, we analyse the conditions for an optimal consumer‐based emission tax rate to exist and the properties of the optimal tax rate. We address these issues in the case of a partial coverage market with a Bertrand duopoly. Furthermore, we discuss some of the assumptions of the model.